My friend Stormin Normin e-mailed this to me, I wanted to share...
Your TV may be watching you
Coming soon to a TV near you: Ads based on your personal preferences.
By Karen J. Bannan, Inter@ctive Week
Don't look now, but your television may be watching you.
MediaOne Inc., in conjunction with Next Century Media Inc., this April plans to start a 12-month test in 3,000 homes with digital set-top boxes that will give cable companies access to their subscribers' minute-to-minute viewing habits and will let consumers pick and choose the commercials and programming they wish to receive. MediaOne is not alone. As soon as next year, any cable operator with a two-way digital deployment will have the same opportunities.
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Interactive television cable services will cull the viewing habits of their subscriber bases to target ads not only to individual households, but also to actual television sets within the household.
"If there is a TV in a teenage girl's room and one in the family room, we can send beer commercials to the den and Cover Girl [cosmetics commercials] into the girl's room," said Bill Harvey, chief executive officer of Next Century Media.
While many analysts said this could bring up privacy issues, one said the transition to the cable system is nothing new.
"Yes, they will know what you buy, who you call if you're using telephony features, what you order, what you watch. But again, that's no different than what goes on today on the Web or with your local telephone company. It's just taking it up another level. Amex [American Express Corp.] already knows everything you buy and Amazon [Amazon.com Inc.] knows what you read. It's just having all of these things funneling through one centralized place," said Cynthia Brumfield, senior analyst at Paul Kagan Associates Inc.
According to Richard Doherty, a director at The Envisioneering Group, a technology consultancy, 1 percent of households will have the ability for interactive targeting by next year; that figure is expected to jump to between 5 percent and 10 percent by the end of 2000.
Targeting
In MediaOne's case, targeting is enabled by an intricate system of hardware, software and human input. On the set-top side, viewers' remote-control habits are analyzed to the point that the system knows who is watching just by the way they channel surf, Harvey said. Individual viewing patterns also are saved, so every time the channel is switched, the cable company can keep a record of it. Next Century also has created custom menus that viewers can use to input their favorite and least favorite television shows and commercials.
"We even have a 'boo' button on the remote that's enabled through existing hardware. You can click to tell the system which commercials you hate," Harvey said. In addition, users are given paper-based surveys when the digital upgrade is put into place in their home. Cable operators can take that information, along with data gleaned from traditional surveys and studies, to match users with the programming that best fits their interests and purchasing habits.
Commercials are "inserted" by software that resides in the headend. However, instead of switching the video feed to a specific set-top, the cable company switches the viewer's channel to a feeder channel for the duration of the commercial time period - an action that is seamless to the viewer.
Win-win-win
"We see this as a win-win-win situation. The cable companies get better revenue-generating commercial time, the advertisers get more target exposure per dollar, and [the viewer] can screen out the stuff that's unwanted," Harvey said.
However, not every cable provider thinks targeted advertising is a good idea.
"This is something we're aware of, but we feel that the cable industry as a whole has to come together to create ground rules for the use of this kind of information. I think there are a lot of people who are focused on the whiz bang capabilities of interactive TV and less on the legitimate concerns of the customers," a Time Warner Cable spokesman said.
Deidra Mulligan, an analyst at industry watchdog group The Center For Democracy and Technology, said she has similar wishes. "The fact that we have a patchwork of private protections that are inconsistent can cause a few problems. Right now, there is a lot of flux and convergence and there is a real need to think through what we allow cable companies to do with our information," she said. "I think it's positive that some cable companies see this as a potential problem."
Although Sean Kaldor, vice president of International Data Corp.'s consumer device research division, said he was concerned about privacy issues, he saw some benefits as well. "Maybe the consumer's cable television is free. If it is, then I'm ready do deal with it. If I'm giving cable companies all this value and added revenues then I say, 'Cut me in on the take.' "
Giving something back
Doherty agreed. "A good percentage of the population is willing to surrender their identity and tastes if you give them something back."
Bill Wall, technical director for subscriber networks at set-top box manufacturer Scientific-Atlanta Inc., said the move to interactive advertising is inevitable. "Targeted ads in the future is going to be a big business for the cabl
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